How to invest in Japan using ETFs

How do I invest in Japanese stocks?

The easiest way to invest in the whole Japanese stock market is to invest in a broad market index. This can be done at low cost by using ETFs.

On the Japanese stock market you find 6 indices, which are tracked by ETFs. Besides these indices 1 alternative index on small and mid caps or equity strategies can be considered.

A speciality for ETFs on Japan is the large number of currency hedged ETFs that are available. In total there are 6 currency hedged indices tracked by 18 ETFs.

Alternatively, you can consider indices on the Pacific region. In the Pacific indices, Japan is strongly weighted with around 67%.

0.09% p.a. - 0.59% p.a.
annual total expense ratio (TER) of Japan ETFs
on the Japanese stock market, which is tracked by ETFs
on the Japanese stock market
The best indices for Japan ETFs

Performance of Japanese stocks (MSCI Japan)

1 month: -1.00%
1 year: 21.67%
3 years: 40.42%
5 years: 71.30%

Indices in comparison

The best indices for ETFs on Japan

For an investment in the Japanese stock market, 6 indices tracked by 20 ETFs are available. On the FTSE Japan index there is 1 ETF. On the JPX-Nikkei 400 index there are 4 ETFs. On the MSCI Japan index there are 10 ETFs. On the MSCI Japan Investable Market (IMI) index there is 1 ETF. On the Nikkei 225® index there are 2 ETFs. On the TOPIX® index there are 2 ETFs. The total expense ratio (TER) of ETFs on these indices is between 0.09% p.a. and 0.59% p.a..

Index Investment focus Number of ETFs Number of constituents Short description

FTSE Japan

Japan 1 ETF 475
(27/02/15)
The FTSE Japan index tracks Japanese large and mid cap stocks.
Index factsheet

JPX-Nikkei 400

Japan 4 ETFs 400
The JPX-Nikkei 400 index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit.
Index factsheet

MSCI Japan

Japan 10 ETFs 319
(31/10/16)
The MSCI Japan (total return) index tracks around 320 leading stocks on the Japanese market.
Index factsheet

MSCI Japan Investable Market (IMI)

Japan 1 ETF 1,210
(31/10/16)
The MSCI Japan Investable Market (IMI) index tracks large, mid, and small capitalisation companies in Japan.
Index factsheet

Nikkei 225®

Japan 2 ETFs 225
The Nikkei 225® index tracks the 225 most actively traded stocks on the first section of the Tokyo Stock Exchange.
Index factsheet

TOPIX®

Japan 2 ETFs 1,947
(01/03/16)
The TOPIX® (total return) index tracks over 1,900 Japanese stocks on the TSE First Section segment of the Tokyo Stock Exchange, which comprises the largest market capitalisations.
Index factsheet
ETF
ISIN
  Fund size
in m GBP
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI Japan UCITS ETF (Dist)IE00B02KXH56 1,635 0.59% p.a. Distributing Ireland Optimized sampling
iShares Core MSCI Japan IMI UCITS ETFIE00B4L5YX21 1,236 0.20% p.a. Accumulating Ireland Optimized sampling
db x-trackers MSCI Japan Index UCITS ETF (DR) 1CLU0274209740 909 0.50% p.a. Accumulating Luxembourg Full replication
Vanguard FTSE Japan UCITS ETFIE00B95PGT31 593 0.19% p.a. Distributing Ireland Full replication
UBS ETF (LU) MSCI Japan UCITS ETF (JPY) A-disLU0136240974 558 0.35% p.a. Distributing Luxembourg Full replication
Lyxor UCITS ETF Japan (Topix) D-EURFR0010245514 549 0.45% p.a. Distributing France Optimized sampling
Lyxor JPX-Nikkei 400 UCITS ETF (DR) C-EURFR0012144582 462 0.25% p.a. Accumulating France Optimized sampling
Amundi ETF MSCI Japan UCITS ETF DR EURFR0010688242 283 0.45% p.a. Accumulating France Full replication
iShares MSCI Japan UCITS ETF (Acc)IE00B53QDK08 254 0.48% p.a. Accumulating Ireland Full replication
db x-trackers Nikkei 225 UCITS ETF (DR) 1DLU0839027447 250 0.09% p.a. Distributing Luxembourg Full replication
Source JPX-Nikkei 400 UCITS ETF AIE00BPRCH686 187 0.40% p.a. Accumulating Ireland Unfunded swap
HSBC MSCI Japan UCITS ETF USDIE00B5VX7566 158 0.19% p.a. Distributing Ireland Full replication
iShares Nikkei 225 UCITS ETFIE00B52MJD48 117 0.48% p.a. Accumulating Ireland Full replication
Amundi ETF JPX-Nikkei 400 UCITS ETF JPYFR0012205623 98 0.18% p.a. Accumulating France Unfunded swap
db x-trackers JPX-Nikkei 400 UCITS ETF (DR) 1DIE00BPVLQD13 85 0.25% p.a. Distributing Ireland Optimized sampling
UBS ETF (IE) MSCI Japan SF UCITS ETF (JPY) A-accIE00B54HQ477 31 0.32% p.a. Accumulating Ireland Swap-based
Source MSCI Japan UCITS ETF AIE00B60SX287 24 0.45% p.a. Accumulating Ireland Unfunded swap
Amundi ETF MSCI Japan UCITS ETF DR JPYFR0010871202 23 0.45% p.a. Accumulating France Full replication
SPDR MSCI Japan UCITS ETFIE00BZ0G8B96 6 0.30% p.a. Accumulating Ireland Optimized sampling
Amundi ETF Japan Topix UCITS ETF JPYFR0012903227 5 0.20% p.a. Accumulating France Unfunded swap
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
MSCI Japan -4.62% 6.11% 24.06% 21.52% 37.21%
FTSE Japan -4.68% 6.55% 24.22% 21.89% 40.54%
TOPIX® -4.67% 7.27% 24.20% 22.73% 41.32%
JPX-Nikkei 400 -4.52% 6.70% 23.71% 22.86% -
Nikkei 225® -4.96% 4.51% 24.39% 22.90% 43.02%
MSCI Japan Investable Market (IMI) -5.00% 6.42% 23.90% 23.18% 42.20%
Index   2016
in %
2015
in %
2014
in %
2013
in %
2012
in %
MSCI Japan 19.92% 14.52% 1.21% 23.57% 3.05%
FTSE Japan 20.20% 16.20% 1.94% - -
TOPIX® 21.05% 15.72% 1.07% 24.65% 2.87%
MSCI Japan Investable Market (IMI) 21.28% 15.99% 1.50% 23.59% 3.11%
JPX-Nikkei 400 22.26% 13.88% - - -
Nikkei 225® 23.01% 15.28% 0.98% - -

Source: justETF.com; As of 30/11/16; Calculations in GBP based on the largest ETF of the respective index.

 

The cheapest Japan ETFs
by total expense ratio (TER)

Show all

Japan ETFs with hedged currency risk

Currency hedged investing in Japanese stocks is popular. In total, you can consider 6 currency hedged Japan indices tracked by 18 ETFs. The total expense ratio (TER) of ETFs on Japan indices with currency hedge is between 0.18% p.a. and 0.64% p.a..

 
Index Investment focus Number of ETFs Number of constituents Short description
JPX-Nikkei 400 (EUR Hedged) Japan 2 ETFs 400
The JPX-Nikkei 400 Daily EUR Hedged index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit. Daily currency hedged to Euro.
Index factsheet
JPX-Nikkei 400 (GBP Hedged) Japan 3 ETFs 400
The JPX-Nikkei 400 GBP Hedged index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit. Currency hedged to GBP.
Index factsheet
JPX-Nikkei 400 (USD Hedged) Japan 5 ETFs 400
The JPX-Nikkei 400 USD Hedged index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit. Currency hedged to US dollar.
Index factsheet
MSCI Japan (EUR Hedged) Japan 2 ETFs 319
(31/10/16)
The MSCI Japan index tracks around 320 leading stocks on the Japanese market. 100% currency hedged to Euro.
Index factsheet
MSCI Japan (GBP Hedged) Japan 4 ETFs 319
(31/10/16)
The MSCI Japan (total return) index tracks around 320 leading stocks on the Japanese market. 100% currency hedged to British Pound (GBP).
Index factsheet
MSCI Japan (USD Hedged) Japan 2 ETFs 319
(31/10/16)
The MSCI Japan (total return) index tracks around 320 leading stocks on the Japanese market. Currency hedged on monthly basis to US dollar.
Index factsheet
ETF
ISIN
  Fund size
in m GBP
TER
in %
Use of profits Fund domicile Replication method
db x-trackers JPX-Nikkei 400 UCITS ETF (DR) 4C (USD hedged)IE00BTGD1B38 3,640 0.30% p.a. Accumulating Ireland Optimized sampling
db x-trackers JPX-Nikkei 400 UCITS ETF (DR) 2D (GBP hedged)IE00BPVLQF37 2,075 0.30% p.a. Distributing Ireland Optimized sampling
iShares MSCI Japan EUR Hedged UCITS ETFIE00B42Z5J44 2,048 0.64% p.a. Accumulating Ireland Optimized sampling
iShares MSCI Japan USD Hedged UCITS ETFIE00BCLWRG39 385 0.64% p.a. Accumulating Ireland Optimized sampling
iShares MSCI Japan GBP Hedged UCITS ETFIE00B7XYN974 261 0.64% p.a. Accumulating Ireland Optimized sampling
Source JPX-Nikkei 400 UCITS ETF USD HedgedIE00BVGC6751 211 0.40% p.a. Accumulating Ireland Unfunded swap
db x-trackers MSCI Japan Index UCITS ETF (DR) 2D (USD hedged)LU0927735406 87 0.60% p.a. Distributing Luxembourg Full replication
Lyxor JPX-Nikkei 400 UCITS ETF (DR) Daily Hedged C-USDFR0012329159 78 0.25% p.a. Accumulating France Optimized sampling
Lyxor JPX-Nikkei 400 UCITS ETF (DR) Daily Hedged C-GBPFR0012329142 52 0.25% p.a. Accumulating France Optimized sampling
UBS ETF (LU) MSCI Japan hedged GBP UCITS ETF (GBP) A-accLU0969638583 50 0.45% p.a. Accumulating Luxembourg Full replication
Nomura JPX-Nikkei 400 NTR D EUR Hedged UCITS ETFIE00BVVSZ262 45 0.30% p.a. Accumulating Ireland Full replication
UBS ETF (LU) MSCI Japan hedged GBP UCITS ETF (GBP) A-disLU0969638401 43 0.45% p.a. Distributing Luxembourg Full replication
iShares JPX-Nikkei 400 EUR Hedged UCITS ETFIE00BQT3W831 16 0.25% p.a. Accumulating Ireland Optimized sampling
Nomura JPX-Nikkei 400 NTR D USD Hedged UCITS ETFIE00BVVSZ379 14 0.30% p.a. Accumulating Ireland Full replication
db x-trackers MSCI Japan Index UCITS ETF (DR) 6C (GBP hedged)LU0659580236 12 0.60% p.a. Accumulating Luxembourg Full replication
Amundi ETF JPX-Nikkei 400 UCITS ETF Daily Hedged USDFR0012688281 10 0.18% p.a. Accumulating France Unfunded swap
Amundi ETF JPX-Nikkei 400 UCITS ETF Daily Hedged GBPFR0012688273 5 0.18% p.a. Accumulating France Unfunded swap
SPDR MSCI Japan EUR Hedged UCITS ETFIE00BZ0G8C04 3 0.35% p.a. Accumulating Ireland Optimized sampling
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
MSCI Japan (GBP Hedged) 5.36% 11.62% 7.74% -9.00% 13.08%
JPX-Nikkei 400 (GBP Hedged) 5.13% 12.12% 6.99% -8.25% -
MSCI Japan (EUR Hedged) 0.14% 11.69% 21.58% 11.04% 16.79%
MSCI Japan (USD Hedged) 2.81% 17.49% 28.19% 11.70% 50.70%
JPX-Nikkei 400 (EUR Hedged) -0.05% 12.21% 20.78% 12.25% -
JPX-Nikkei 400 (USD Hedged) 2.61% 18.03% 27.31% 12.82% -
Index   2016
in %
2015
in %
2014
in %
2013
in %
2012
in %
MSCI Japan (GBP Hedged) -6.51% 8.63% 8.30% 51.64% -
JPX-Nikkei 400 (GBP Hedged) -6.45% - - - -
MSCI Japan (EUR Hedged) 9.13% 2.73% 0.88% 53.97% 13.93%
JPX-Nikkei 400 (EUR Hedged) 9.18% - - - -
MSCI Japan (USD Hedged) 12.75% 14.50% 14.27% - -
JPX-Nikkei 400 (USD Hedged) 13.52% - - - -

Source: justETF.com; As of 30/11/16; Calculations in GBP based on the largest ETF of the respective index.

 
Alternative investment opportunities

Japanese indices on small and mid caps or equity strategies

Alternatively, you may invest in indices on small and mid caps or equity strategies. In total, you can invest in 1 alternative index on Japan tracked by 1 ETF. The total expense ratio (TER) of ETFs on these alternative indices is around 0.58% p.a..

 
Index Investment focus Number of ETFs Number of constituents Short description
MSCI Japan Small Cap Japan
Small Cap
1 ETF 891
(31/10/16)
The MSCI Japan Small Cap (total return) index tracks Japanese small cap stocks.
Index factsheet
ETF
ISIN
  Fund size
in m GBP
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI Japan Small Cap UCITS ETF (Dist)IE00B2QWDY88 323 0.58% p.a. Distributing Ireland Optimized sampling
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
MSCI Japan Small Cap -6.94% 7.19% 21.80% 27.42% 56.28%
Index   2016
in %
2015
in %
2014
in %
2013
in %
2012
in %
MSCI Japan Small Cap 24.96% 20.63% 5.06% 22.69% -0.89%

Source: justETF.com; As of 30/11/16; Calculations in GBP based on the largest ETF of the respective index.

 

Pacific indices with a large share of Japan

Besides, Japan ETFs you can consider ETFs on the Pacific stock market. On the Pacific region 6 indices tracked by 18 ETFs are available. The MSCI Pacific index contains a significant weight of Japan with around 67%. The total expense ratio (TER) of ETFs on the Pacific region is at -.

 
 
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